Breakaway Country [Northwestern Ontario] – by Livio Di Matteo

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post on September 06, 2006.

Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay, Ontario, and a co-author of a recent paper in Canadian Public Policy dealing with “Mantario.”

How can we empower people in these regions to help solve their own problems rather than wait for a supplicated solution from a pharaoh in a distant capital? In an act of supreme neglect, the Canadian federation has allowed its vital “zone of transit” [Northwestern Ontario] to decline to the point where an errant moose could choke the lifeblood of the nation. – Livio Di Matteo (Sept/06)

The isolated residents of northwestern Ontario are tired of life as a resource extraction colony. One option would be to create a new province – Mantario

The northwestern portion of Ontario, comprising the Districts of Thunder Bay, Kenora and Rainy River, represents 60% of Ontario’s land and an area the size of France. It was an imperial acquisition of the 19th-century when the province viewed itself as “Empire Ontario.”

It is a region rich in natural resources but sparse in population, and yet it is vital to the Canadian federation as an east-west transport corridor for road, ship and rail. Indeed, one can only imagine how different Canadian history might have been had northwestern Ontario become part of Minnesota. While alienation from Southern Ontario has affected all of Northern Ontario, sparking periodic calls to separate, the feeling has become particularly acute in the region stretching from White River to Kenora.

Given the personal ties many residents have with Manitoba it is not surprising that union with Manitoba is a popular option in the northwest as well as in Manitoba, if recent poll results are accurate.

The feeling has been aggravated by the recent forestry sector crisis, which many believe has been worsened by “one size fits all” provincial government policies dealing with energy costs and land access. Dealing with economic change requires institutional responses on the part of government, and the small population of the region makes it difficult to get its issues on the Queen’s Park radar screen, which seems to regard the northwest as merely a resource extraction colony.

A glance across the border at Manitoba finds electricity costs for the energy-intensive pulp sector half what they are in Ontario. Despite the continual expression of dissatisfaction, the government at Queen’s Park remains sphinx-like in its silences on the northwest, no doubt hoping that by maintaining a pose of splendid isolation, the noise in the attic will eventually go away.

A recent paper published in Canadian Public Policy explores three options for institutional change in the alienated resource hinter land region. These are union with Manitoba, provincial status and regional government.

The paper finds that there would be substantial political benefits for the residents of northwestern Ontario in joining Manitoba in a new province called “Mantario” as they would have 11 of 68 seats in the legislature as opposed to three out of 103 in Ontario. As for the economics of the new arrangement, northwestern Ontarians would have to trade off higher spending and taxes as part of Manitoba against lower spending and lower taxes in Ontario.

Provincial status is a feasible option provided northwesterners are prepared to reside in a province with a small population that is dependent on federal transfers, and provided the rest of Canada is willing to accommodate it.

Regional government is the easiest and probably most realistic option should Queen’s Park be willing to devolve significant economic powers to regional authorities, for the management of crown lands and electric power.

Why is this issue of importance to Canada? First, it brings to the fore the plight of small resource-dependent regions that are undergoing significant economic change. While Canada is becoming increasingly urbanized, resource industries are still important to its economy. Even if resource-producing areas end up with fewer people, we are still going to have to provide services for those people and give them an effective voice in their governance. Often they know their regional needs best when it comes to economic development, transportation and even public services.

Are the people of northwestern Ontario and other remote resource regions simply colonists to be administered, or are they participating citizens of our democracy? How can we empower people in these regions to help solve their own problems rather than wait for a supplicated solution from a pharaoh in a distant capital? If Canadians in adjacent regions have similar preferences and demographics, should we not be making it easier for them to work together?

Second, northwestern Ontario is actually of vital strategic importance to Canada, given its historic role as a “zone of transit” between east and west. Yet, the east-west transport corridors that traverse northwestern Ontario have been allowed to gradually deteriorate over the past 30 years, in part because the issue does not interest Southern Ontario.

This is a short-sighted economic policy with implications that will come home to roost as the United States becomes increasingly concerned about its border security. Should another act of catastrophic terrorism occur, the resulting border shutdown will not only affect trade with the United States but also disrupt trade and travel within Canada as east-west travel and commerce is forced to rely on the cow path passing for a noational highway through northwestern Ontario. In an act of supreme neglect, the Canadian federation has allowed its vital “zone of transit” to decline to the point where an errant moose could choke the lifeblood of the nation.

If a free and open referendum were held, northwestern Ontario and Manitoba voters would opt for creating Mantario. A recent CBC Radio poll found 72% of Manitobans would support union while an informal Web poll by Thunder Bay Source found that 64% of northwestern respondents would support union. If anything this issue is a reminder that Canada and its provinces are not entities anchored on blocks of granite nd that borders can be changed and new provinces can be created.

However, changing provincial borders or creating a new province means all borders are changeable, and the Canadian federation does not appear to have reached that level of sophistication and maturity. This is after all, a nation that took 50 years to repatriate its own constitution. Moreover, this type of change requires political action not only on the level of individual members of the public but by the governments of Ontario and Manitoba. To date, both provincial governments have declined to publicly discuss the issue.

The most practical option for now is for Queen’s Park to take steps to devolve some of its powers to a regional government for northwestern Ontario. Functions to be devolved to a northwestern regional government include economic development, environment, energy, municipal affairs, lands and natural resources, mines, transport and tourism. This regional government would have the power to negotiate its own arrangements with respect to resource development, energy and transportation with adjacent Manitoba. Expenditures could be funded by an income tax point transfer from Queen’s Park to the regional government, as well as points from sales taxes. A regional council and chief executive elected by northwestern voters would provide the necessary accountability mechanism.

Regional government would help end Ontario’s “northern problem” by transferring the tools of economic development to the people most affected. Ontario can become an innovator in dealing with the issues of sparsely populated resource hinterlands by letting the people assume responsibility for their own future. It is time for Ontario to let its northwestern people go.